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The Sad State Of American Inequality In 12 Charts

[Speaks for itself. *RON*]Andy Kiersz, Business Insider, 12 November 2014

AP

Income and wealth inequality continue to be a major political issue in the US and around the world. The World Economic Forum just surveyed its list of Global Agenda Council Members on the biggest issues facing the world, and rising inequality came in at number one.

On a number of measures, inequality in the US has been rising for the last few decades.

We put together a dozen charts and maps that show some of the core issues of inequality.

The Gini index is a standard measure of inequality, ranging from 0 to 1. The index measures how far away the income distribution in a population is from a completely egalitarian distribution. An index of 0 corresponds to a completely equal distribution, in which everyone has the same income, and and index of 1 is a completely unequal distribution, in which one person gets all the income and everyone else gets nothing. The Gini index has steadily risen in the US since the late 1960s.

According to a 2013 paper by Berkeley economist Emmanuel Saez, at the start of the century through the roaring twenties, the top of the heap got an outsized share of income. After the New Deal and World War II, that share drops precipitously, in a period often referred to as the "Great Compression". From the early eighties to the present, that top income share has started to skyrocket back to where it was at the start of the twentieth century.

But just looking at the top 10% doesn't tell the whole story. Here's that group broken into smaller components:

The top ten-thousandth of earners — the top 1% of the 1% — took in about 5.4% of total income in 2012.

In addition to seeing an ever larger share of income, the top 0.01% has also had their real incomes grow by over 600% over the last three decades, while real incomes for the bottom 90% have been stagnant:

People in the bottom 90% frequently don't have enough extra income to keep saving. As Business Insider's Shane Ferro recently put it, "People need somewhere to live, and they have to keep up with increasing tuition if they want to go to college. Necessary fixed costs increased while incomes stagnated, so saving gave way to debt in order for people to maintain the same lifestyle they had in previous decades."

One interesting aspect of wealth inequality is that Americans vastly underestimate the degree of inequality:

This chart, based on data from the Equality of Opportunity Project, shows that the higher up on the income ladder a parent is, the more likely their child will end up in the top part of the income distribution. A child whose parents are already in the top fifth is more than three times as likely to stay at the top than a child from the bottom fifth is to get there.

This map shows where a typical child starting in the middle of the bottom half of the income distribution will end up in the income rankings as an adult. Lighter counties have more intergenerational mobility; darker counties have more children ending up in the same part of the income distribution as their parents.

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